Is the Dow Close to Breaking from this Multi-Decade Pattern?

December 20th, 2012

by Chris Kimble

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Notice that the markets have been a little boring of late, with not much upside/downside action taking place. Could it be due to the monster patterns taking shape in the Dow (chart below)?

The rising wedge pattern above reflects that key support and resistance are very near, which could be the reason the markets are so quiet. Two-thirds of the time rising wedges break to the downside. Regardless of the odds of a breakout/breakdown, the completion of this pattern would suggest the boring markets will start showing significantly greater movement in the months ahead.

The trade on this pattern would be to step aside now and then follow the completion of this pattern.

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